PORTAGE — The Portage school board may be able to get out of its contract with Superintendent Marsha Wellsfor as little as $10,000 in expense to the district, based on the district’s liability insurance policy and the terms of Wells’ contract, the Kalamazoo Gazette has learned.

Under Wells’ contract, which expires on June 30, 2012, the board does not have to pay her beyond her termination date if she is fired for cause. If Wells sues the school district, the district’s liability insurance policy covers breach-of-contract cases with a $10,000 deductible. The coverage includes legal expenses and settlements of up to $5 million, according to a copy of the policy obtained by the Gazette.

Wells’ contract also allows for the district to terminate the superintendent without cause. Under that provision, the district must pay her salary and benefits for the remainder of the contract minus any income earned between the time Wells leaves the district and the contract’s expiration date. At this time, the remainder of Wells’ contract is worth about $250,000.

The Gazette obtained a copy of the insurance policy through a Freedom of Information Act request. Board members said the district’s liability insurance has not been a factor in their discussions and they were not aware of the policy’s provisions.

“I have not looked at the policy,” board President Kevin Hollenbeck said last week.

A majority of school board members have said publicly they want to terminate Wells’ employment, but one concern has been how much that would cost the district, particularly at a time when the district is facing the likelihood of substantial budget cuts.

The board is meeting at 6:30 p.m. Monday and the agenda includes a closed session with the district’s attorney. Hollenbeck said he is not sure if the board will take a vote after the closed session on Wells' employment.

Hollenbeck has said the board has discussed four options in regards to Wells: Termination with cause; termination without cause; a negotiated buyout of the contract; or allowing Wells to stay until her contract expires in 16 months.

Four board members — Melanie Kurdys, Joanne Wilson, Bo Snyder and Rusty Rathburn — have publicly supported terminating Wells’ contract now. Two board members — Hollenbeck and Geoffrey Howe — have said they support replacing Wells when her contract expires. The seventh board member, Randy VanAntwerp, is a Wells supporter.

Wells has indicated she will not leave voluntarily. A sign the board may fire Wells and is bracing for a potential lawsuit: The board’s lawyer for this dispute is Lisa Swem, whose expertise is litigation involving school districts.

Last March, after Wells rejected trustees’ informal requests to review administrator contracts, the board changed its policy to require their approval for contract renewals. In July, about three months later, Wells renewed 15 of the contracts without the board’s knowledge — a fact the board discovered last month.

But terminating Wells — with or without cause — could leave the district vulnerable to a lawsuit, arguing the superintendent’s actions did not justify her dismissal and her professional reputation has been damaged.

“There’s no way I’m going to comment” on the merits of terminating Wells or a potential Wells’ lawsuit, said Brad Banasik, a legal counsel and director of labor relations for the Michigan Association of School Boards.

But, he said, in general, “termination for just cause has to be for a very serious incident.”

One expert who says it appears the Portage board has grounds to fire Wells for just cause is Alan Sklover, a New York attorney who has specialized in employment cases for three decades and wrote the book, “Fired, Downsized or Laid Off: What Your Employer Doesn’t Want You To Know About How To Fight Back.” Sklover describes himself as a “zealous advocate for employees,” but says it appears Wells committed “willful disobedience” in renewing the administrator contracts without board approval.

“The superintendent works for the board,” Sklover told the Gazette in a telephone interview. “If she was aware of the board’s directive, if the directive was clear, if that directive wasn’t immoral or illegal, if her contract doesn’t give her that authority, then she committed willful disobedience, which constitutes just cause for termination.”

But, he added, “Unless you know all the facts, and I don’t, there may be many defenses” that Wells can employ.

Banasik said the controversy in Portage is highly unusual and he can’t remember a similar case in his 13 years with the state association. While board-superintendent conflicts are not uncommon, they usually end with a contract buyout where the superintendent agrees not to sue or the superintendent’s conduct is so egregious that the firing is not challenged.

“There’s usually a buyout where the separation occurs quietly or there’s enough there for just-cause” dismissal, Banasik said.

Portage Public Schools was sued eight years ago by a former administrator who claimed his reputation was damaged by district officials.

That case involved John Conroy, the district’s former high school and community education director. Conroy retired from the district in 2000 and a year later was accused of embezzling $350,000 from the district’s day-care program, which he oversaw.

Conroy pleaded guilty to larceny, but the judge ruled the district’s bookkeeping was poor and unreliable, and Conroy’s restitution was set at $1,772.

Conroy filed a lawsuit against the district in 2003, seeking $3.5 million for malicious prosecution, abuse of the judicial process, defamation and intentional infliction of emotional distress. The case was dismissed 10 months later, and Conroy did not receive a financial settlement in the case.